Automated strategies for investment management

Abstract

The invention is in the field of using a computer to select corporate stocks for investment. Fifty stocks are selected from a database on the basis of certain criteria. The stocks are acquired in equal proportions, and the portfolio is rebalanced at the end of an annual term. Strategy I: market capitalization greater than $172 million (inflation adjusted figure for $150 million in 1994 dollars.); price-to-sales ratio less than 1.5; earnings higher than in previous year; market capitalization greater than market capitalization three months ago; market capitalization greater than market capitalization six months ago; buy stocks with highest one-year stock price appreciation. Strategy II: market capitalization greater than database mean; common shares outstanding greater than database mean; cashflow greater than the database mean. (creating SET A); price-to-sales ratio less than average for SET A; sales greater than 1.5 times the average for the database; no utility companies; buy the 25 or 50 stocks with the best one year stock price appreciation.

What is claimed is:  
     
       1. A method for carrying out computerized selection of stocks for an investment portfolio comprising the steps of: 
       (a) accessing a database of stock information with a computer;  
       (b) selecting stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria include selecting stocks of companies with database records indicating: (i) market capitalization in excess of $172,000,000; (ii) price-to-sales ratios lower than 1.5; (iii) annual earnings that are higher than the previous year's annual earnings; (iv) market capitalization higher than the market capitalization three months ago; and (v) market capitalization higher than the market capitalization six months ago;  
       (c) sorting records identifying the stocks which meet said criteria in descending order of one year appreciation in stock price into a sorted list; and  
       (d) making available from the top of said sorted list a listing of a number of stocks.  
     
     
       2. A method for carrying out computerized selection of stocks for an investment portfolio comprising the steps of: 
       (a) accessing a database of stock information with a computer;  
       (b) selecting stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria includes market leaders with the highest dividend yields; wherein market leaders are stocks of companies that are not utilities and that have (i) a market capitalization in excess of the database mean (ii) more common shares outstanding than the average stock in the database (iii) cashflows per share exceeding the database mean; wherein said stocks create SET A; and where price-to-sales ratios are less than average for SET A; and (iv) sales that are 1.5 times the database mean;  
       (c) sorting records identifying the stocks which meet said criteria in descending order of one year appreciation in stock price into a sorted list; and  
       (d) making available from the top of said sorted list a listing of a number of stocks.  
     
     
       3. A method for carrying out computerized selection of stocks for an investment portfolio of claim  2 , further comprising the steps of: 
       (e) selecting a second set of stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria include eliminating utilities and selecting stocks of companies with database records indicating: (i) market capitalization in excess of $172,000,000; (ii) more common shares outstanding than database average; (iii) cashflow per share higher than database mean; (iv) sales that are greater than 1.5 times the database mean;  
       (f) sorting records identifying the stocks in said second set which meet said criteria in descending order of dividend yield into a sorted list; and  
       (g) making available from the top of said sorted list a listing of a number of stocks;  
       (h) making available a listing of said sets of stocks.  
     
     
       4. The method of claim  3 , further comprising the steps of: 
       (i) investing half of funds into a laddered T-bill portfolio;  
       (j) investing half of funds into stocks selected in accordance with claim  3 .  
     
     
       5. A method for carrying out computerized selection of stocks for an investment portfolio comprising the steps of: 
       (a) accessing a database of stock information with a computer;  
       (b) selecting stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria includes market leaders with the highest dividend yields; wherein market leaders are stocks of companies that are not utilities and that have (i) a market capitalization in excess of the database mean (ii) more common shares outstanding than the average stock in the database (iii) cashflows per share exceeding the database mean; wherein said stocks create SET B; and where price-to-sales ratios are less than average for SET B; and (iv) sales that are greater than 1.5 times the database mean;  
       (c) sorting records identifying the stocks which meet said criteria in ascending order of price-to-sales ratio into a sorted list; and  
       (d) making available from the top of said sorted list a listing of a number of stocks.  
     
     
       6. A method for carrying out computerized selection of stocks for an investment portfolio of claim  5 , further comprising the steps of: 
       (e) selecting a second set of stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria includes market leaders with the highest dividend yields; wherein market leaders are stocks of companies that are not utilities and that have (i) a market capitalization in excess of the database mean (ii) more common shares outstanding than the average stock in the database (iii) cashflows per share exceeding the database mean; wherein said stocks create SET C; and where price-to-sales ratios are less than average for SET C; and (iv) sales that are greater than 1.5 times the database mean;  
       (f) sorting records identifying the stocks which meet said criteria in descending order of one year appreciation of stock price in to a sorted list; and  
       (g) making available from the top of said sorted list a listing of a number of stocks; and  
       (h) making available a listing of said sets of stocks.  
     
     
       7. A method for carrying out computerized selection of stocks for an investment portfolio of claim  2 , further comprising the steps of: 
       (e) selecting a second set of stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria include eliminating utilities and selecting stocks of companies with database records indicating: (i) market capitalization in excess of $172,000,000; (ii) more common shares outstanding than database average; (iii) cashflow per share higher than database mean; (iv) sales that are greater than 1.5 times the database mean;  
       (f) sorting records identifying the stocks in said second set which meet said criteria in descending order of dividend yield into a sorted list;  
       (g) making available from the top of said sorted list a listing of a number of stocks;  
       (h) selecting a third set of stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria includes market leaders with the highest dividend yields; wherein market leaders are stocks of companies that are not utilities and that have (i) a market capitalization in excess of the database mean (ii) more common shares outstanding than the average stock in the database (iii) cashflows per share exceeding the database mean; wherein said stocks create SET D; and where price-to-sales ratios are less than average for SET D; and (iv) sales that are greater than 1.5 times the database mean;  
       (i) sorting records identifying the stocks which meet said criteria in ascending order of price-to-sales ratio into a sorted list; and  
       (j) making available from the top of said sorted list a listing of a number of stocks; and  
       (k) making available a listing of said sets of stocks.  
     
     
       8. A method for carrying out computerized selection of stocks for an investment portfolio comprising the steps of: 
       (a) accessing a database of stock information with a computer;  
       (b) selecting stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria include selecting stocks of companies with database records indicating: (i) a market capitalization in excess of the database mean; (ii) price-to-sales ratios lower than 1.5; (iii) annual earnings that are higher than the previous year's annual earnings; (iv) market capitalization higher than the market capitalization three months ago; and (v) market capitalization higher than the market capitalization six months ago;  
       (e) sorting records identifying the stocks which meet said criteria in descending order of one year appreciation in stock price into a sorted list; and  
       (d) making available from the top of said sorted list a listing of a number of stocks.  
     
     
       9. A method for carrying out computerized selection of stocks for an investment portfolio comprising the steps of: 
       (a) accessing a database of stock information with a computer;  
       (b) selecting stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria include selecting stocks of companies with database records indicating: (i) a market capitalization in excess of the $25,000,000; (ii) a market capitalization not greater than $250,000,000; (ii) price-to-sales ratios lower than 1;  
       (c) sorting records identifying the stocks which meet said criteria in descending order of one year appreciation in stock price into a sorted list; and  
       (d) making available from the top of said sorted list a listing of a number of stocks.  
     
     
       10. A method for carrying out computerized selection of stocks for an investment portfolio comprising the steps of: 
       (a) accessing a database of stock information with a computer;  
       (b) selecting stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria include selecting stocks of companies with database records indicating: (i) a market capitalization in excess of $150,000,000; (ii) good trading liquidity; and (iii) annual earnings that are higher than the previous year's annual earnings; (iv) market capitalization higher than the market capitalization three months ago; and (v) market capitalization higher than the market capitalization six months ago;  
       (c) sorting records identifying the stocks which meet said criteria in descending order of one year appreciation in stock price into a sorted list; and  
       (d) making available from the top of said sorted list a listing of a number of stocks.  
     
     
       11. A method for carrying out computerized selection of stocks for an investment portfolio of claim  10 , further comprising the steps of: 
       (e) selecting a second set of stocks for an investment portfolio based on information in said database meeting certain second criteria; wherein said second criteria include selecting stocks of companies with database records indicating: (i) a market capitalization in excess of the $150,000,000; (ii) earnings gains for five consecutive years; and (iii) price-to-sales ratio less than 1.5;  
       (f) sorting records identifying the stocks in said second list which meet said criteria in descending order of one year appreciation in stock price into a sorted list; and  
       (g) making available from the top of said sorted list a listing of a number of stocks.  
     
     
       12. A method of carrying out computerized selection of stocks for an investment portfolio of claim  10 , further comprising the steps of: 
       (e) selecting a second set of stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria includes market leaders with the highest dividend yields; wherein market leaders are stocks of companies that are not utilities and that have (i) a market capitalization in excess of the database mean (ii) more common shares outstanding than the average stock in the database (iii) cashflows per share exceeding the database mean; wherein said stocks create SET E; and where price-to-sales ratios are less than average for SET E; and (iv) sales that are greater than 1.5 times the database mean;  
       (f) sorting records identifying the stocks which meet said criteria in descending order of one year appreciation in stock price into a sorted list;  
       (g) making available from the top of said sorted list a listing of a number of stocks;  
       (h) selecting a third set of stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria includes market leaders with the highest dividend yields; wherein market leaders are stocks of companies that are not utilities and that have (i) a market capitalization in excess of the database mean (ii) more common shares outstanding than the average stock in the database (iii) cashflows per share exceeding the database mean; wherein said stocks create SET F; and where price-to-sales ratios are less than average for SET F; and (iv) sales that are greater than 1.5 times the database mean;  
       (i) sorting records identifying the stocks which meet said criteria in ascending order of price-to-sales ratio into a sorted list; and  
       (j) making available from the top of said sorted list a listing of a number of stocks; and  
       (k) making available a listing of said sets of stocks.  
     
     
       13. A method for carrying out computerized selection of stocks for an investment portfolio of claim  10 , further comprising the steps of: 
       (e) selecting s second set of stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria includes market leaders with the highest dividend yields; wherein market leaders are stocks of companies that are not utilities and that have (i) a market capitalization in excess of the database mean (ii) more common shares outstanding than the average stock in the database (iii) cashflows per share exceeding the database mean; wherein said stocks create SET G; and where price-to-sales ratios are less than average for SET G; and (iv) sales that are greater than 1.5 times the database mean;  
       (f) sorting records identifying the stocks which meet said criteria in descending order of one year appreciation in stock price into a sorted list;  
       (g) making available from the top of said sorted list a listing of a number of stocks;  
       (h) selecting a third set of stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria includes market leaders with the highest dividend yields; wherein market leaders are stocks of companies that are not utilities and that have (i) a market capitalization in excess of the database mean (ii) more common shares outstanding than the average stock in the database (iii) cashflows per share exceeding the database mean; wherein said stocks create SET H; and where price-to-sales ratios are less than average for SET H; and (iv) sales that are greater than 1.5 times the database mean;  
       (i) sorting records identifying the stocks which meet said criteria in ascending order of price-to-sales ratio into a sorted list;  
       (j) making available from the top of said sorted list a listing of a number of stocks;  
       (k) selecting a fourth set of stocks for an investment portfolio based on information in said database meeting certain criteria; wherein said criteria include eliminating utilities and selecting stocks of companies with database records indicating: (i) market capitalization in excess of $150,000,000; (ii) more common shares outstanding than database average; (iii) cashflow per share higher than database mean; (iv) sales that are greater than 1.5 times the database mean;  
       (l) sorting records identifying the stocks in said fourth set which meet said criteria in descending order of dividend yield into a sorted list;  
       (m) making available from the top of said sorted list a listing of a number of stocks; and  
       (n) making available a listing of said sets of stocks.  
     
     
       14. The method of claim  7 , further comprising the steps of: 
       (l) investing half of funds into a laddered T-bill portfolio; and  
       (m) investing half of funds into stocks selected in accordance with claim  7 .  
     
     
       15. A computer programmed to carry out the steps of claim  1 . 
     
     
       16. A computer-readable medium having imprinted therein a computer program containing instruction steps such that upon installation of said computer program in a general purpose computer, the computer is capable of performing the method of claim  1 . 
     
     
       17. A computer programmed to carry out the steps of claim  2 . 
     
     
       18. A computer-readable medium having imprinted therein a computer program containing instruction steps such that upon installation of said computer program in a general purpose computer, the computer is capable of performing the method of claim  2 . 
     
     
       19. A computer programmed to carry out the steps of claim  5 . 
     
     
       20. A computer-readable medium having imprinted therein a computer program containing instruction steps such that upon installation of said computer program in a general purpose computer, the computer is capable of performing the method of claim  5 . 
     
     
       21. A computer programmed to carry out the steps of claim  8 . 
     
     
       22. A computer-readable medium having imprinted therein a computer program containing instruction steps such that upon installation of said computer program in a general purpose computer, the computer is capable of performing the method of claim  8 . 
     
     
       23. A computer programmed to carry out the steps of claim  9 . 
     
     
       24. A computer-readable medium having imprinted therein a computer program containing instruction steps such that upon installation of said computer program in a general purpose computer, the computer is capable of performing the method of claim  9 . 
     
     
       25. A computer programmed to carry out the steps of claim  10 . 
     
     
       26. A computer-readable medium having imprinted therein a computer program containing instruction steps such that upon installation of said computer program in a general purpose computer, the computer is capable of performing the method of claim  10 .